It follows moves to discourage insurers from settling whiplash claims that have not been backed up by medical evidence. Doctors preparing whiplash assessments are also to be prevented from offering treatment to injured claimants to ensure that perverse incentives are removed.

The fee change, which takes effect in October, will mean medical professionals can only charge £180 for an initial report, reflecting the time taken to carry out assessments and write them up. Currently, prices of up to £700 are charged, leading to concerns that they are being used to generate profit.

Grayling said: ‘Honest drivers have been bearing the cost of a system that has been open to abuse and it is time for a change.

‘We are determined to have an improved, robust system for medical evidence – so genuine claims can still be settled but fraud is driven out of the market.’

The Association of British Insurers welcomed the announcement.

‘The cost to honest motorists of exaggerated and fraudulent whiplash claims still remains too high so any move to reduce the “have-a-go compensation culture” is supported by insurers,’ said James Dalton, head of motor and liability at the ABI.

‘We look forward to working with the government and others to develop a more robust framework, with independent, accredited and peer-reviewed medical experts.

‘This is absolutely fundamental to cleaning up the personal injury sector as it simply can’t be right a medical expert is paid by a lawyer who has a financial interest in the clinical finding.’